UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Minh Phuong FRONT LINE STAFF TURNOVER & RETENTION AT MAJESTIC SAIGON HOTEL MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City - 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Minh Phuong FRONT LINE STAFF TURNOVER AND RENTENTION AT MAJESTIC SAIGON HOTEL MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr NGUYEN THI MAI TRANG Ho Chi Minh City - 2019 EXECUTIVE SUMMARY The most important feature of the hospitality sector is that it is based on human element and it is labor intensive Since one of the competitive advantages of a hotel business is the customer service, it is crucial to manage its people assets The customer satisfaction in hotel accommodation will be greatly depend on the success of the personnel Nevertheless, there is a rising problem of staff leaving as opposed to the ongoing growth of tourism industry and important extension of job possibilities in Ho Chi Minh City It is demanding for hotel itself to attract and retain qualified experts Reducing the rate of staff leaving and keeping them involved in activities is the option to lessen economic losses and maintain competitiveness This thesis aims at investigating the causes of Majestic hotel’s present changes in front office personnel A qualitative research methods via in-depth interviews with the objective of gaining preliminary perception of human resource management at Majestic hotel The goal was to gather more comprehensive data in order to get a further idea of their work The findings are discussed in details in the research along with some recommendations for the hotel and management board to improve turnover rate in the hotel ACKNOWLEDGEMENT A completed study would not be done without any assistance Therefore, I gratefully give acknowledgement to all who supported me during the time of doing this research First of all, a special thanks to my supervisor – Professor Nguyen Thi Mai Trang for all valuable guidance, without her advice this could not have been possible I also would like to show my gratitude to my colleagues at work and my friends for a continuous support I also send my sincere thankfulness to my parents for their care and love TABLE OF CONTENTS EXECUTIVE SUMMARY ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES INTRODUCTION 1.1 Saigontourist holding company background 1.2 Majestic Saigon Hotel PROBLEM CONTEXT 2.1 Overview of the operation of the hotel for years: 2.2 The turnover rate status in hospitality industry 12 2.3 The turnover status in hotel 13 3.1 Policies on working hours 16 3.2 Bonuses and benefits 18 3.3 Working environment 19 3.4 Supervisor support 20 3.5 Cause –and –effect tree 21 CAUSE VALIDATION 23 ALTERNATIVE SOLUTIONS 25 5.1 Alternative solution 1: 25 the line manager assign or reallocate the appropriate tasks to staffs 25 5.2 Alternative solution 2: 27 Reorganize training sessions on time management and task leadership 27 ORGANIZATION OF ACTIONS 29 CONCLUSION 32 SUPPORTING INFORMATION 32 APPENDIX 54 REFERENCES 55 LIST OF TABLES Table 1: Business Performance of the Hotel 2016 - 2018 Table Quantity and income/month of hotel in 2018 Table -4 Training costs for management Table Action plan LIST OF FIGURES Figure –Organization Chart (2018) Figure – Business results of Majestic Saigon Hotel from 2016 to 2018 Figure – Annual revenue breakdown of Majestic Saigon Hotel from 2016 -2018 Figure – Analytics of each function ‘s turnover rate Figure 5– The turnover rate of other hotels 2017-2018 Figure - Recruitment cost 2018 Figure - Cause –and –effect tree INTRODUCTION 1.1 Saigontourist holding company background Saigontourist was founded 44 years ago since starting from 1975 in Ho Chi Minh city originated from the travel industry Saigontourist has diversified its company, and now manages travel agents, hotels, resorts and restaurants fully equipped It will actively grow its branches overseas to guarantee a continuous development in a variety of fields 1.2 Majestic Saigon Hotel Majestic Saigon Hotel is a member of Saigontourist Corporation A star hotel with French architecture located next to Bach Dang wharf, in the center of city The richest Vietnamese American merchant of Saigon - Gia Dinh built a hotel named Majestic at the corner of the Catinat It was renamed Cuu Long, but the name was still Majestic, under the leadership of the department of tourism It continued with the upgrade to floors and expanded further to Ton Duc Thang Street until 2000s On February 27 2007, this hotel was recognized star standard by the Vietnam National Administration of Tourism Majestic is also the first five-star hotel by the Vietnamese self-investment and management The Majestic Hotel was awarded the "Green Hotel" by the Asean of Asia Association and includes 175 rooms In addition, Majestic also has restaurants: - Cyclo Restaurant specializes exclusively in serving food bearing Vietnamese identity - Catinat Lounge serves Majestic's signature tea, coffee, fruit, and cocktails - Breeze Sky Bar opens 24/24 and serves breakfast, lunch, seafood buffet in the evening - Serenade specializes in serving European dishes - Prime hall: accommodating 500 guests, fully equipped with the facilities of an international meeting room - M bar: serve the food, favorite drink is prepared in Majestic style Especially the presence of the band Flamenco - F & B (food and beverage) restaurants are responsible for catering to guests when they come to the hotel The customers to the hotel are businessmen, high class tourists, tourists in the form of MICE (a type of tourism combining conferences, seminars, exhibitions, corporate travel for employees ) and international visitors GM Asst.GM DGM HR Dept Accounting Dept Sales & Marketing Dept F&B Dept Housekeeping Dept Energy & Mineral Dept Front Office Dept Figure Majestic hotel’s organizational structure (Source: Majestic’s Human Resource Department) This thesis focuses on the research of front line staffs who make a direct interaction with guests Therefore , it is easy to see that they are valuable assets and play key roles in the hotel and their contribution are important in hotel growth According to the statistics shown in the hotel report, the number of employees leaving has dramatically increased in the past years from 2016 to 2018 Especially in front office area, this number of staffs quitted their jobs are even more surprising This will be done through the use of qualitative research Specifically, it will be an analysis of reviews by employees and managerial responses The outcome provides a guidance tool to management, and it relates to turnover levels has to be reduced and minimized by applying possible methods PROBLEM CONTEXT 2.1 Overview of the operation of the hotel for years: This is reflected in the targets of total revenue, profit of the business activities of Majestic Saigon hotel over the years as follows: Table Business Performance of the Hotel 2016 – 2018 Category 2016 2017 % Bil.VND Bil.VND 2018 % Bil.VND % 269 100 266 100 253.422 100 Accomodation 147.95 55 149.758 56.3 141.41 55.8 F&B 94.957 35.33 92.568 34.8 87.177 34.4 Other services 26.093 9.67 23.674 8.9 24.835 9.8 II Cost 150.57 55.97 142.748 53.6 132.112 52.13 84.46977 56.10 82.22 57.6 74.776 56.6 56.237895 37.35 51.53 36.1 48.089 36.4 9.862335 6.55 8.99 6.3 9.247 118.43 44.03 123.252 46.4 121.31 47.87 63.48023 53.60 67.538 54.80 66.634 54.93 F&B 38.719105 32.69 41.038 33.29 39.088 32.22 Other services 16.230665 13.71 14.684 11.91 15.588 12.85 I Revenue Accomodation F&B Other services III Profit before tax Accomodation (Source: Accounting Division of Majestic Saigon Hotel) The chart below shows the business results of the hotel over the past few years : 300 250 200 150 100 50 Revenue Cost 2016 Profit 2017 2018 Figure Business results of Majestic Saigon Hotel from 2016 to 2018 10 quite inflexible and often time-consuming In order to have a space with a personnel price it is required to give a document and permission of other hotel departments, which is a bit frustrated In other places, an operation like this could be computer automated, therefore it generally doesn’t waste much time Uniform is prepared well, staffs don’t need to take care by themselves Annual team building are comfortable therefore staffs felt great with their peers Do you believe that your work is stressful ? How does it work ? 2D Certainly Our job is to interact with different people therefore their demands are different too Combined with a five star hotel scale, an amount of work is huge as well How about your relationships with peers ? 2D : Yeah, we’ve had a powerful connection Semi-formal at times Do you have excellent manager relationships? 2D : Not everybody Some of them lacked sufficient experience and strong skills Can you be creative at job and speak your thoughts ? 2D: Yes, mostly Do you believe that every shift has enough staffs ? 2D : It’s been enough What is the range of career progression ? 2D: I did not want to build a career in Majestic Due to the experience , I regarded it to be the brief time job Trainings have organized , but not very well structured There is a chance to go further in a career Do your executives get enough competencies and skills? 2D: FO manager I trusted his skills, but I can’t say that for the remainder Some of the staffs have been biased FO manager personally recruited prospective candidates That’s why, some managers hired couldn’t behave as they should or were too emotional in complex circumtances Do you believe that executives appreciate your contribution and commitment to the job process 2D: Sure, however it would be good to get a bonus or prize How about a FO management attention for staff ? 2D : There are staffs that managers give a priority A scenario is demonstrated with continous back 43 office talks that supervisors continued to discuss staff about behavior Tell me an reason that you chose a hotel work ? 2D : There’s certainly a large space for improvements Majestic hotel is a perfect location for a brief job I used to work in a vibrant team experience, our staffs were able to contribute their job knowledge With distinct backgrounds, we were totally different, so approaches to services also varied I’ve learnt a lot at the end Why did you choose to work here ? 2D: Since I am still young and any hospitality specialist would like to work in such place Is a real job like as your anticipation ? 2D : There has a bit unalike It was fair enough at the start phases but with too many duties with the same wage after I was allocated And my line management wasn’t helpful either I believe that most of my additional duties have been moved from management In-depth interview 6: • Interviewer (H): Huynh Minh Phuong • Interviewee (3B): Nguyen Thi Binh • Title: HR Manager • Date of interview: 12 August 2018 • Duration : 25 minutes • Address: Majestic hotel What you believe about hotel working hours ? 3B : I believe it conforms to the –star hotel norms Our staffs are experts, so with assigned duties they should feel comfortable Do you have a good balance in your work life? 3B :Yes, I have a nice timetable in common I operate hours per day Do you believe that your job shifts are intended for the benefit of employees and employers 3B : We tried to design it for the benefit of both Does your employer ask for additional working hours ? 3B : Sometimes yes, particularly when it peaks But of course staffs have been paid extra 44 Are your present wages better than a prior job? 3B : My wage now is a bit greater Have you got a monthly income on time? 3B : Sure Does hotel give a scheme of bonuses and benefits ? 3B : As back office staff, we don’t get a bonus, but there is always 13th wage Do you believe your wages are commensurate with your duties ? 3B : yeah, it is What are your opinions about hotel benefit package ? 3B : Yes, health take care fee is ok as other places The uniform is beautiful quality We are constantly organizing activities that can improve peer working relationship We want to build a sense of “family” at work Do you believe that your work is stressful ? How does it work ? 3B Yes, because the turnover of staff is very high Every time an appropriate candidate to fill the role is so hard to discover Are you with your peers in good relationships ? 3B : Yes, certainly Do you have excellent manager relationships? 3B : Sure Do you believe you’re involved in decision making ? 3B : We have to be involved in decision making with the HR department But it is not a distinct unit of hotel We this with the hotel vision Can you be creative at job and speak your thoughts ? 3B : For sure Do you believe that every shift has enough staffs ? 3B : Yes, we are following the Saigontourist standard brand The need for this amount of individuals 45 to stay at this workplace How about a range of job progression ? 3B : We set up training on a weekly basis, which is essential In general, promotions should be every 1-1,5 years Do you believe that your executives have enough experience and skills in their employment ? 3B : Yes Do you believe that executives appreciate your contribution and commitment to the job process 3B : Sure, absolutely How about a FO management attention for staff ? 3B : I totally agree with that This is always a crucial for hotel organization to consider their staffs fairly Why you like your hotel work ? 3B : I like the options of gaining as many skills as I can for my profession Why did you choose to work here? 3B : My experience is the most important for my career later on , so a completely fresh hotel team would be great Was the real job the same as you anticipated ? 3B : Absolutely, it is a good workplace In-depth interview 7: • Interviewer (H): Huynh Minh Phuong • Interviewee (1A): Dang Nha Thanh • Title: FO staff • Date of interview: 12 August 2018 • Duration : 25 minutes • Address: Majestic hotel - Current line employee 46 Could you please introduce about yourself and your position in the hotel ? 1A: I am FO staff in the hotel What you believe about hotel working hours ? 1A : A working hours are arranged proportional with duties , however they still could improve more Have you get a strong combination between work and personal life ? 1A: Not yet,however in the future it could be Are job shifts intended for a benefit between employees or employers? 1A: I see they are for guests’ benefits more Since our duties are done , we still remain at work to solve and complete a request for our guest Does your employer ask for additional working hours ? 1A: My executives are seriously opposed to it At work, they don’t like burning outs I’ve got to work extra,though, just because it’s logically necessary Is a present wages better than your prior job? 1A: A little bit, however extended duties with rigid rules this payment goes with Do you get your payment in time? 1A: Yes, there were never any issues with it Does hotel have a scheme of bonuses and benefits ? 1A: Yes, bonuses should be forthcoming quickly Now there was merely no time for it because of other problems, so this may alter in the near future Do you believe your wages are commensurate with your duties ? 1A: No, never I’ m doing a lot too much But sadly, it is the same in any hotel Tell us about hotel indirect bonuses ? 1A: Health insurance is the same as before, so there’s nothing luxury I booked a unique price space, however it is time consuming for preparing documents Is your work stressful ? How does it work ? 1A: It’s not an office work because of individuals, the environment and curcumstances can differ 47 Tell me your opinions about the job here compared to another private hotel ? 1A: Managers here believe we ought to live in the workplace, therefore it becomes a working family I see in private hotels have more freedom I don’t care about late job,however a balanced working hours are better Are you with your peers in good relationships ? 1A: Yes Do you have excellent manager relationships? 1A: Sure Can you be creative at job and speak your thoughts ? 1A: Yes ,with guests in particular , I’m attempting to exceed expectations Does a hotel have an adequacy number of staff ? 1A: It is How about a range of job progression ? 1A: As hotel requirements, a promotion will be given for top performs every two years I used to work in other hotels, so I created a plan by myself Did your executives have enough experience and skills ? 1A: They did Did executives appreciate your contribution and commitment to the job process ? 1A: I think they did What you think about FO management attention towards staff ? 1A: Naturally, everyone is equal If not , how we operate the hotel Why you like your hotel work and choose to be here ? 1A: I like my peers, I like to interact and share the experience with global visitors I like working with individuals I like to organize parties I also knew my managers before, so it is more glad to work with someone you already understand Was the real job the same as you anticipated ? 1A: No it’s a lot harder Because it is a center hotel in most crowded city 48 In-depth interview 8: • Interviewer (H): Huynh Minh Phuong • Interviewee (1B): Nguyen Phuong Thao • Title: FO staff- Ex-line • Date of interview: 08 August 2018 • Duration : 25 minutes Could you please introduce about yourself and your position in the hotel ? 1B: I am a frontline staff In the task area it covers the front office, call center, club lounge The guest service suite includes the concierge , bellboys and the Guest Relations Department, which takes the first contact with the guest looking for during their stay These are basically heavyweight Have you worked in any hotels before Majestic ? 1B: No, there are only internships It’s my first place of job What you believe about hotel working hours ? 1B: It’s too stressful After the change, I feel so tired Can’t imagine how individuals in this field have been working here for more than a decade I believe I would travel more frequently when I joined What is your opinion about a balance between time allocated for work and personal interests? 1B : At present , I see just work relates However, a scenario could be quickly altered Do you believe that your job shifts are intended for the benefit of employees and employers? 1B : Naturally in the employer’s favor Does your employer ask for additional working hours ? 1B : When we had to prepare for peak season, it wasn’t How would you compare your present payments to the prior job? 1B :You don’t expect any higher wage when you are an intern Do you get your payment in time? 1B :Yes Does hotel have a scheme of bonuses and benefits ? 1B :Sometimes I get suggestions from the guest for assistance or to prepare a particular space 49 Do you believe your wages are commensurate with your duties ? 1B Though a wage is little higher than other place but a lot of norms and guidelines are in place How about other benefits for staffs at Majestic ? 1B :In general, normal benefits have been nice Is your work stressful ? How does it work ? 1B : It is because of different guests with so many demandings Are you with your peers in good relationships ? 1B Yes Do you have excellent manager relationships? 1B I think I Are you involved in a choice making ? 1B Not often I’m going to say it during the meeting if I have an idea Can you be creative at job and speak your thoughts ? 1B Yes , I can be Do you believe that every shift has enough staffs ? 1B Yes, according to hotel What is the range of career progression ? 1B : Trainings are fundamental but they are useful to repeat frequently A hotel is known for having a good adaptation for staffs , therefore that is a nice chance to build a career Do you believe that your executives have enough experience and skills in their employment ? 1B : Some of them not at all Do you believe that executives appreciate your contribution and commitment to the job process 1B : I think they What you think about FO management towards staff ? 1B : I disagree For sure, there’s an individual that leaders like 50 Why you like your hotel work and choose here at Majestic? 1B : My interest is travel and hospitality sector in specific After school, I find a job and see an opportunity here Was the real job the same as you anticipated ? 1B : For now , it’s hard, but I might just have to get used to it In-depth interview 9: • Interviewer (H): Huynh Minh Phuong • Interviewee (1C): Ma Quoc Hung • Title: Current HR staff • Date of interview: 08 August 2018 • Duration : 25 minutes • Address: Majestic hotel Could you please introduce about yourself and your position in the hotel ? 1C: I'm responsible for training and apprentices, for both line staff and leaders in the hotel and also to implement any projects,make sure all standards are in line and new employee are well trained Is there sufficient staff in hotel for planning ? 1C Yes , it is Specially, in a peak season, there is always more than a number of normal tasks and it needs a big supporting from supervisors What is the range of career progression ? 1C : A promotion is supposed to be after two years at first and lately a wage rise is given Do executives own enough competencies and skills ? 1C: That’s right, yes But they ought to be more relaxed I’m scared of their approach Do you believe that executives appreciate your contribution and commitment to the job process? 1C : I think I believe it is What is your opinion about FO management attention towards staffs ? 1C: Well, frankly , I don’t understand I believe so Why you like your hotel work ? 1C : Our colleagues now are like a second family My job gives me a chance to meet new people 51 worldwide I can learn different things from other cultures Why did you choose to work here at Majestic ? 1C : My desire is to have an experience for working in this standard of hotel Do you think your current position matched with your anticipation ? 1C : It might be better It is supposed that most of my duties are fixed but it doesn’t work like this in reality 52 Data collected after the interview: Question What are the reasons why front line staffs in hotel decided to leave soon? What is the key main reason lead to the issue? What is the solution Findings 1A Unbalance worklife Payments not in line with responsibilities & workload Low trust level in middle management Supervising support 1B Stress factors Poor work life balance Payments not in line with duties 2A Too many duties Poor functioning reward system Too many duties , Inability of combine not combined with work with studies studies Payments not in line with responsibilities & workload No involvement in decision making Leadership Every individuals Conduct leadership and task trainings to managers Flexible policy 2B Manager assigns the should have a which works suitable workload to mentor to the best and the team members communicate and should be receive the taken first? coaching 2C Workload Leadership Unclear tasks Inability of combine work with studies Train managers to understand how to handle guests, manage the workload for team 2D 3A 3B Lack of financial rewards and bonuses Poor management Biased attitude Low trust Inability of level in management to implement hotel middle management policies into practice Lack of supervising experience and competencies Low trust level in middle management Middle Train in time Recruit trainees to management training increase Stress factors and task balance the management workload for the team coaching 53 APPENDIX Current KPIs Report from Human Resources Department in 2018 Performance indicators I Per shift Number of failures at work Number of required tasks II Efficiency Efficiency of employees in service delivery Time used Schedule roaster III Quality Percent of mistakes, which not meet quality criteria Number of complains Quality of internal and external services IV Service plan tracking Percent of service requests finished ahead Percent of service requests finished late V People Management Compliance with regulations and attitude at work Lost workdays due to illness/personal issues Ensure an effective interaction is maintained with other teams and Staff Executive X X X X X X X X X X X X X X X X X X X X X X X X departments Evaluation results from the HR department Complete job satisfaction Turnover rate Employee‟s proposals for innovations Provide support and input to continuous improvement activities within the X X X X X team Ensure quality of training course for services and processes within the team X Deal with personnel issues in line with hotel policy and agreements Feedback to the Management team to share ideas and improve operation X X 54 REFERENCES UNWTO Tourism Highlights: 2018 Edition | World Tourism Organization [cited 2019Jul24] Available from: https://www.e-unwto.org/doi/book/10.18111/9789284419876 Hotel Survey 2018 [Internet] Grant Thornton Vietnam | Audit | Tax | Advisory | Outsourcing [cited 2019Jul24] Available from: https://www.grantthornton.com.vn/insights/articles/thought-leadership/traveltourism-leisure/hotel-survey-2018/ Koushan D Vietnam’s Tourism Industry Continues its Growth in 2018 [document on the internet] The Vietnam Tourism Association;2019[cited 2019 July 25] Available from https://www.vietnam-briefing.com/news/vietnams-tourism- industry-continues-growth-2018.html/ Mohamad H.A, Nurzeti R.A Turnover of hotel managers: Addressing the effect of psychological contract and affective commitment World Applied Sceinces Journal 2010;10; 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2013 24 Vandenberghe C, Bentein K, Stinglhamber F Affective commitment to the organization, supervisor, and work group: Antecedents and outcomes Journal Of Vocational Behavior 2004;64(1);47-71 25 Lee TW, Mitchell TR An alternative approach: The unfolding model of voluntary employee turnover Academy Of Management Review 1994;19(1);51-89 26 Kwantes CT Organizational commitment, intellectual capital and organizational competitiveness South Asian Journal Of Management 2007;14(3);28 57 ... competitive benefit stated by Zopiatis et al Increasing turnover rate of employees poses a threat to hotel vision of being a leading hotel Ellepola M.G stated that maintaining low turnover rate helps reduce... development in a variety of fields 1.2 Majestic Saigon Hotel Majestic Saigon Hotel is a member of Saigontourist Corporation A star hotel with French architecture located next to Bach Dang wharf, in... workplace 12 2.3 The turnover status in hotel Based on the HR report and analysis from hotel, as shown in Figure 4, the turnover rate of hotel staffs was 41% (it means 34 staffs left the hotel) in 2018,